The general shareholders’ meeting of
Yuexiu Property was held in Hong Kong on April 3. The proposals of acquiring
86% equity of Guanhu Project and allotting stocks worth 3.081 billion yuan to
Guangzhou Metro have been overwhelmingly approved. It shows the capital market
approves Guangzhou metro's investment in Yuexiu Property and endorses the
development mode of "rail transit + property", which also marks the
successful implementation of Yuexiu Property’s strategy of "rail transit +
property".

Lin zhaoyuan,
Chairman of Yuexiu Property, said after the transaction, the company will add
1.46 million square meters of land storage in Guangzhou, and the land storage
of Yuexiu Property will reach up to 9 million square meters, accounting for
about 43% of the total land reserves, being a significant contribution to the
company's sales resources and cash flow. The introduction of Guangzhou Metro as
a strategic shareholder will enhance the ability and advantage of Yuexiu
Property to acquire rail transit property resources.

Zhang, Zhaoxing, Chairman of Guangzhou Yuexiu Group, said Guanhu Project
is the first program under the development mode of “rail transit +
property”cooperated by Yuexiu Group and Guangzhou Metro. This Project has a
good sales record and proves this development mode has a bright market
prospect. Both parties will strengthen the strategic cooperation relationship
and carry out in-depth cooperation in the future.

To add million square meters land storage along the rail transit
every yearTo be more competitive

According to
the metro plan in Guangzhou, in the next five years, Gangzhou Metro will strive
to double the length of its line network from 478 kilometers to 800 kilometers
by 2023 with construction of 33 new station complexes. It will go to 2000
kilometers by 2035. Lin Zhaoyuan said the company will select right projects to
cooperate with Guangzhou Metro. The goal of the company is to acquire one or
two rail-property projects and store about one million square meters land every
year.

By the end of 2018, the total land storage of Yuexiu Property had been
19.41 million square meters, and that in the base camp of Guangzhou was 7.62
square meters. After this transaction, Yuexiu Property will add 1.46 million
square meters of land storage in Guangzhou, and the land storage of Guanghou
will reach up to 9 million square meters.

It is estimated that Guanhu Project
will contribute about 3.5 billion yuan, and the gross profit rate of the
Project is predicted to be around 30%. Upon completion of the acquisition of
Guanhu Project, the continuous sales of Guanhu Project and the acquisition and
sales of 1-2 projects every year in the future will be a virtuous cycle of “sales
supporting acquisition” and enable Yuexiu Property to have a better control on
production-sales schedule and cash flow.

It is worth noting that Yuexiu Property
will further expand the in-depth cooperation with state-owned enterprises in
other provinces and cities with both parties' resources, and copy the mode of
"rail transit + property" to other cities.

When being asked about the strategic
impact of this cooperation on Yuexiu Property, Lin Zhaoyuan said that the Great
Bay area is the key area of Yuexiu Property. In the future, with the
improvement of Guangzhou's position in the Greater Bay Area and the possible
business synergies between the company and Guangzhou metro, Yuexiu Property
will further enhance its competitiveness and obtain more opportunities in the
Greater Bay Area.

As per the introduction of Guangzhou Metro, in order to realization of
strategies in Guangdong-Hong Kong-Macao Greater Bay Area, Guangzhou Metro is actively
building an urban railway transit network for “internal reach and external
connection”and preparing intensely for intercity railway operation so as to
build a “Great Bay Area on the track”. Strategic investment in Yuexiu Property
is an innovative measure for Guangzhou Metro based on the new real property
development mode of “metro+intercity+”. It will focus on construction of rail
transit and station complexes with high quality through capital and market
effect to rocket the industrial development of both sides.

Zhang Zhaoxing pointed
out that, by making use of advantages of both parties, Yuexiu Group and
Guangzhou Metro will continue to reinforce and strengthen strategic cooperation
in the future and carry out in-depth cooperation on infrastructure construction
and connection and building a qualified life circle suitable for living, working
and traveling in the Great Bay Area so as to raise the overall strength, quality
efficiency and development pattern to a new level.